Even the lead singer of Talking Heads has no idea how Apple's music royalty payments work

David Byrne
Photo by KMazur/WireImage
If the world needed any more proof of how absurdly convoluted the streaming music business is, the former frontman of the legendary band Talking Heads has now provided it.

It seems that even David Byrne, a music industry veteran who was the lead singer of the critically-acclaimed Talking Heads, is as much in the dark as everyone else about some of the royalty rates that Apple and other streaming services pay artists when their songs get played.

In an op-ed in the New York Times, Byrne says that it's time for the record labels and streaming services to open up the "black box" and make clear exactly "how they share the wealth generated by music."

The music industry is a notoriously difficult business to understand, with byzantine, private contracts, deals and licenses governing how much musicians get paid. The issue has been thrust in the spotlight as new Internet streaming music services increasingly replace digital downloads, CDs and other forms of recorded music sales.

New streaming music services such as Apple Music, Spotify and Google's YouTube give consumers instant access to unprecedented amount of music right at their fingertips, but the innovation has not translated into a golden age for musicians.

"Tales of popular artists (as popular as Pharrell Williams) who received paltry royalty checks for songs that streamed thousands or even millions of times (like "Happy") on Pandora or Spotify are common," write Byrne. For lesser-known artists, the situation is even worse, he says.

But Byrne notes that it's still not clear how much Apple agreed to pay or how they will determine the rate. Even people in the industry like Byrne don't know:

I asked Apple Music to explain the calculation of royalties for the trial period. They said they disclosed that only to copyright owners (that is, the labels). I have my own label and own the copyright on some of my albums, but when I turned to my distributor, the response was, "You can't see the deal, but you could have your lawyer call our lawyer and we might answer some questions."

Byrne didn't get much more detail when he asked YouTube similar questions.

I asked YouTube how ad revenue from videos that contain music is shared (which should be an incredibly basic question). They responded that they didn't share exact numbers, but said that YouTube's cut was "less than half." An industry source (who asked not to be named because of the sensitivity of the information) told me that the breakdown is roughly 50 percent to YouTube, 35 percent to the owner of the master recording and 15 percent to the publisher.

The first step towards creating a more equitable business model for everyone in the music industry is to open up the black box and provide more information, in Byrne's view.